Santiment on-chain analytics platform described a factor that could contribute to Cardano (ADA) and XRP enjoying new upward moves. Both tokens have registered relief surges following the recent decline in the crypto market, but market traders believe this development is far from a bullish reversal.
Short selling by heavy traders could lead to Cardano and XRP price surges
Santiment claimed in an X (formerly Twitter) publish that the strong short selling that Cardano and XRP are currently seeing could be the “rocket fuel” for continued price increases for these crypto tokens. Sanction also revealed that Cardano and XRP were among the most notable altcoins that are heavily shorted following their relief bounces.
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![Cardano and XRP short selling activity could act as 'rocket fuel' for a rally; Sanction 1 Cardano XRP](https://thegurumedia.com/wp-content/uploads/2024/06/XRP-Cardano.png)
Interestingly, they called this a “good sign” for patient bulls as they believe liquidation of these short positions It could effectively be the boost these crypto tokens need to climb even higher. Cardano and XRP being named among the most shorted altcoins is not surprising considering they are the lowest-performing coins this year among the top 50 crypto tokens by market cap.
Cardano and XRP also generally fail to enjoy significant relief pumps, even as Bitcoin (BTC) and the broader crypto market enjoy a massive recovery. However, this time may be different as Cardano and XRP enjoyed a modest price recovery while some other altcoins delay.
Data from Coinglass shows that Santiment’s theory may already be in play, seeing as bears Cardano and XRP have suffered significant losses in the last 24 hours. More than $50,000 worth of Cardano short positions were liquidated during this period, while not a single cent of Cardano long positions was liquidated. Similarly, over $30,000 worth of XRP short positions were liquidated, while XRP long positions were unaffected.
A big move could be on the horizon for XRP
Crypto Analyst Egrag Crypto recently foreseen that XRP could enjoy a price increase of around 1,700% starting in July. He alluded to XRP’s quarterly quarter hammer formation Between April and June 2016 and July and September 2017, before the crypto token enjoyed a huge boost. The crypto analyst stated that XRP could form this bullish pattern again but needed to close the 3-month candle above the range between $0.55 and $0.58 within 10 days.
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![Cardano and XRP short selling activity could act as 'rocket fuel' for a rally; Sanction 2 XRP Cardano 2](https://thegurumedia.com/wp-content/uploads/2024/06/XRP-Cardano-2.png)
Egrag It further stated that if the hammer formation is similar to that of 2016, XRP could begin the projected 1,700% price rally in July, eventually sending the crypto token to $8. However, if the hammer formation is similar to 2017, Egrag mentioned that XRP holders may have to wait another six months before the “epic” surge of around 5,500%, sending XRP price to $27.
Featured image created with Dall.E, chart from Tradingview.com